Scientists and institution leaders say proposed 15% indirect‑cost cap would cripple small labs and slow clinical trials

At a Senate Appropriations hearing on biomedical research, institutional leaders and committee members warned that a proposed across‑the‑board 15% cap on indirect costs would threaten the ability of many research institutions to host grants and run clinical trials.

Dr. Herman Haller, president of the Mount Desert Island Biological Laboratory in Bar Harbor, Maine, described indirect costs — often called facilities and administrative costs — as the funds that pay for lab space, compliance staff, microscopes, security and shared services that make grant-funded experiments and trials possible. “Independent research institutions like mine, without a large endowment and without revenues from tuition, we are dependent on the present system of indirect cost reimbursement,” Haller said. He added that a 15% cap “endangers our work and the work of all the other independent research institutions, and we will not be able to participate in lifesaving research and biomedical breakthroughs.”

Senator John Kennedy pressed witnesses on comparisons to private foundations that set lower overhead limits. He noted Gates Foundation grants typically limit overhead to about 10% and the Robert Wood Johnson Foundation to about 12% and asked why universities “cannot live on 15% overhead.” Dr. Sudip Parikh responded that such comparisons are “apples to oranges” because foundations and federal accounting treat many costs differently; Parikh stressed that federal reimbursement supports legally required compliance, shared instrumentation, and institutional support that foundations may treat as direct costs or exclude.

Dr. Barry Sleckman of the University of Alabama at Birmingham said indirect‑cost reductions would directly affect the ability to open and safely run clinical trials: “If the indirect cost drops, we will no longer be able to support the level of staff needed to safely open and run clinical trials,” he said. He explained that direct trial funds typically cover the experimental drug and patient care costs, but not oversight groups such as institutional review boards and legal offices needed to run trials in compliance with federal requirements.

Committee members and witnesses emphasized that many independent or less‑endowed research institutions — including regional biomedical labs and IDeA‑funded centers — rely on indirect cost reimbursement to maintain shared facilities and hire compliance staff, and that a sudden cap would disproportionately harm rural and smaller programs. Dr. Haller said his laboratory has used indirect cost reimbursement to retain faculty, train undergraduates and support shared core facilities; he warned a cap “will not be able to participate in what we have been heard here in lifesaving research.”

Senators and witnesses also discussed oversight and audit questions and said misuse of federal funds at individual universities (several senators referenced past audits of large institutions) should be addressed through targeted enforcement rather than a blanket cap that would reduce capacity across the system. Witnesses urged the committee to pursue reforms that increase transparency and efficiency while preserving the funding streams that sustain compliance, shared infrastructure and trial oversight at institutions that lack large endowments.

The committee did not adopt any policy during the hearing; senators said they would continue oversight and consider legislative and appropriations responses to address both abuses and the systemic needs of the research enterprise.